Samco ELSS Tax Saver Fund

Equity Linked Saving Scheme (ELSS), also known as tax-saver fund, is an open ended Equity mutual fund scheme that invest primary in equity related products. However, these ELSS mutual funds have a three-year mandatory lock in term, which is the shortest lock in period if compared to all other products that are available under Section 80C of the Income Tax Act, 1961.

Investors who wish to invest for a minimum of 3 years and are looking for higher return potential, plus the added benefit to save tax under section 80C can invest in ELSS Tax Saver Fund. At the same time, the investors should also prepare for a certain amount of risk attached to it. This is because of the equity exposure in the portfolio. Therefore, ELSS mutual funds are best suited for investors who understand equity asset class risk. These tax saver funds offer higher returns potential when compared to other tax saving schemes.

The following are the critical factors that must be considered by investors before they invest in ELSS Tax saver fund:

• Investment horizon: The investor must have a three-year investment horizon to contemplate investing in ELSS funds. To limit market volatility, the equity exposure of ELSS funds necessitates a longer investment horizon.
• Returns: ELSS funds do not give guaranteed returns as they are wholly dependent on the performance of the underlying securities.

Yes, ELSS has a lock-in period of three years. This means one cannot withdraw their money before the said tenure ends. However, ELSS has the shortest lock-in period as compared to other similar tax-saving investments currently such as 5-year Fixed Deposits (five years), National Savings Certificate (five years), Public Provident Fund (15 years), etc.

• Dual benefit: ELSS funds are the only type of funds in the Indian market, that give the dual benefit of a tax rebate and wealth appreciation. Under Section 80C of the Income Tax Act, 1961, who fall in the higher income tax brackets, can save up to Rs 46,800 in a year if they invest Rs 1.5 lakh per annum in ELSS and are in the 30% income tax bracket. However, Investor will get a maximum tax deduction of Rs 1.5 lakh per year in ELSS under Section 80C even if they invest more than this amount.
• Shortest lock-in: Currently, ELSS has the shortest lock-in period of three years under Section 80C of Income Tax Act 1961.
• Potentially higher returns: Unlike ELSS where return is market linked, other 80C investments like PPF or FDs are fixed income products. ELSS has the potential to generate significantly higher wealth in a medium to long-term investment horizon.

The redemption proceeds of ELSS are not entirely tax-free. The long-term capital gains of up to Rs 1,00,000 a year are tax-free, and any gains above this limit attract a long-term capital gains tax at the rate of 10% plus applicable cess and surcharge.

The investment objective of the scheme is to generate long-term capital appreciation through investments made predominantly in equity and equity related instruments. However, there can be no assurance or guarantee that the investment objective of the scheme would be achieved.

The Fund's strategy will endeavor to have a predominantly higher allocation to mid and small cap companies which will be selected through focusing on the fundamentals of the business, the industry structure, the quality of management, sensitivity to economic factors, the financial strength of the company and the key earnings drivers. The scheme will invest in about 30-40 scripts to ensure adequate diversification and reduced risk.

The following persons (subject to, wherever relevant, purchase of Units of mutual funds, being permitted under respective constitutions, and relevant statutory regulations) are eligible and may apply for Subscription to the Units of the Scheme:

• Resident adult individuals
• Hindu Undivided Family (HUF) through Karta;
• Minor (as the first and the sole holder only) through a natural guardian (i.e. father or mother, as the case may be) or a court appointed legal guardian.
• Partnership Firms including limited liability partnership firms;
• Proprietorship in the name of the sole proprietor;
• Companies, Bodies Corporate, Public Sector Undertakings (PSUs), Association of Persons (AOP) or Bodies of Individuals (BOI) and societies registered under the Societies Registration Act, 1860(so long as the purchase of Units is permitted under the respective constitutions);
• Banks (including Co-operative Banks and Regional Rural Banks) and Financial Institutions;
• Religious and Charitable Trusts, Wakfs or endowments of private trusts (subject to receipt of necessary approvals as "Public Securities" as required) and Private trusts authorised to invest in mutual fund schemes under their trust deeds;
• Non-Resident Indians (NRIs) / Persons of Indian origin (PIOs)/ Overseas Citizen of India (OCI) residing abroad on repatriation basis or on non-repatriation basis;
• Foreign Institutional Investors (FIIs) and their sub-accounts registered with SEBI on repatriation basis;
• Army, Air Force, Navy and other para-military units and bodies created by such institutions;
• Scientific and Industrial Research Organizations;
• Multilateral Funding Agencies / Bodies Corporate incorporated outside India with the permission of Government of India / RBI;
• Other schemes of Samco Mutual Fund or any other mutual fund subject to the conditions and limits prescribed by the SEBI (MF) Regulations;
• Schemes of Alternative Investment Funds;
• Trustee, AMC or Sponsor or their associates may subscribe to Units under the Scheme;
• Qualified Foreign Investor (QFI)
• Such other person as maybe decided by the AMC from time to time.

The above list of persons in category 4 to 18 are not eligible for tax benefits under Section 80 C of the Income-tax Act, 1961 but are entitled to subscribe to units.

The minimum amount for application for an investor will be Rs. 500.

There is Nil entry/exit load on Samco ELSS Tax Saver Fund.

The Scheme performance would be benchmarked against Nifty 500 TRI

The fund will be jointly managed by Mr. Umeshkumar Mehta, Mrs. Nirali Bhansali, Mr. Dhawal Ghanshyam Dhanani and Mr. Vishal Shinde.